Daily Archives: May 20, 2013

Topher Spiro is the Vice President for Health Policy at the Center for American Progress.

Imagine an academic study that is so well-timed, so relevant to a current policy debate, that it’s widely cited to support a major policy decision. But now consider this: the study has severe limitations and doesn’t turn out to support that policy decision after all.

Sound familiar? The study by Harvard’s Carmen Reinhart and Ken Rogoff on the effects of debt on the economy (which was used to support fiscal austerity) fits this description – but now we also have the Oregon Medicaid study. Earlier this month, this study found that the Medicaid program – which provides health insurance to poor people – didn’t improve certain measures of physical health. Many commentators took this as proof that Medicaid is fatally flawed and that states shouldn’t expand their programs under the Affordable Care Act law.

The study has been heralded as the gold standard because it was “randomized.” It compared people who got Medicaid through a lottery with people who did not – the only difference between the two groups was the randomness of the lottery. And random experiments are indeed the gold standard. But in key respects, this study is far from the gold standard on the question of Medicaid’s effects on physical health.

The study didn’t measure overall health status – or anything close to it – and the effects over time. Rather, it included only a few measures, such as blood pressure, cholesterol and blood sugar levels, over only two years. It’s unclear why the researchers couldn’t have waited a few years to provide a clearer picture.

But more important, it’s now clear that the study wasn’t even designed to detect an effect on physical health, even if one existed. Simply put, it didn’t include enough people in poor health to measure effects that would be clinically meaningful. Doing the math, the economist Austin Frakt found that the sample sizes were as much as 23 times too small.

Before jumping to conclusions, it’s important to have a plausible theory about why Medicaid might not improve physical health. One theory is that because Medicaid pays doctors so little, few doctors participate in the program, so the insurance card doesn’t actually provide access to care. But the study showed that Medicaid substantially increased the use of health care services, including the use of preventive and screening services.

To believe that Medicaid doesn’t improve physical health, we’d have to believe that clinical treatments don’t work. The study showed that Medicaid improved the diagnosis of diabetes and increased the use of diabetes medication. Do we really believe that diabetes medication doesn’t work, despite mountains of evidence from clinical trials?

It’s possible that access to health care might not improve physical health if the quality of care is poor. We know that doctors don’t always follow evidence-based guidelines for treatment, care isn’t always coordinated and the payment system rewards more and more tests and procedures that may have no marginal benefit and may even be harmful.

Our health care system has a great deal of room for quality improvement, but this isn’t a problem unique to Medicaid. Gutting Medicaid, as critics propose, isn’t a rational or targeted policy response. Rather, look no further than Oregon – which is reforming its Medicaid program to provide more coordinated care.

To say that improvement is always possible doesn’t mean that Medicaid doesn’t improve physical health. The Oregon Medicaid Study certainly didn’t prove that – the way it was designed, it couldn’t have. But where the study did have large sample sizes, it showed that Medicaid does have sizable effects, on financial security and mental health.

The study showed that Medicaid nearly eliminated catastrophic medical costs. And people were about 60 percent less likely to borrow money or skip payments because of medical bills. The purpose of insurance, as a means of payment, is to provide financial security – and Medicaid clearly fulfills that purpose.

The study also showed that Medicaid improved mental health substantially. Specifically, coverage lowered rates of depression by 30 percent. And we know that mental health is significantly intertwined with physical health. In the wake of the Newtown tragedy and calls on all sides of the political spectrum to improve mental health, it’s hard to see how this result can just be ignored by opponents of the health care law.

The lesson of the Reinhart and Rogoff study, and now the Oregon study, is that academic work will be politicized. Knowing that, researchers should take great care in what they release. Unlike Reinhart and Rogoff, the Oregon researchers didn’t make a mistake in their Excel spreadsheet, but they did release results that were inconclusive.

Like Reinhart and Rogoff, the Oregon researchers aren’t responsible for policy decisions – those who misrepresent studies and hype them to support pre-existing beliefs are. Unfortunately, it’s the misrepresentation that gets coverage, not the study’s limitations.

In follow-up studies, the Oregon researchers may be able to release conclusive results about Medicaid’s effects on physical health. But in the meantime, we do know that Medicaid improves quality of life substantially.

Like this:

By David Pittman, Washington Correspondent, MedPage Today

Published: May 16, 2013

WASHINGTON — The Obama administration is trying to allow states greater flexibility to change their Medicaid programs without asking the federal government for special waivers, a top health official said here Thursday.

For example, the Centers for Medicare and Medicaid Services (CMS) has tried to ease regulations in recent months — beginning last August — to allow states to create integrated delivery models for Medicaid without such waivers, Cindy Mann, JD, said at a meeting of the Medicaid and CHIP Payment and Access Commission (MACPAC).

More recently, CMS allowed states to increase patient cost-sharing for using nonpreferred drugs or making unnecessary emergency department visits, said Mann, who is director of Medicaid and the Children’s Health Insurance Program (CHIP) at CMS.

“Of course, much of this is at the instigation and creativity of states and the changes in the marketplace, saying ‘Wait a minute. We should be doing things a little bit differently,’ ” Mann said. “The program is one that is a living, breathing program. It’s always changing. Congress is making changes. We’re making changes.”

Waivers may still be needed, however, to sidestep statutory requirements of the federal law dictating Medicaid and CHIP, Mann said.

CMS has 65 section 1115 waivers currently in place. The waivers, which have the approval of the Secretary of Health and Human Services, allow states to embark on demonstration projects to redesign and improve their Medicaid programs.

The agency also has 320 section 1915c waivers in place, which give states flexibility in offering long-term-care services.

But too often states are unaware of the changes they can make to their Medicaid programs without going through CMS’ waiver process. “There’s little appreciation sometimes of the flexibility of the Medicaid program,” Mann said.

Commissioner Sara Rosenbaum, JD, founding chair of the department of health policy at George Washington University here, noted that CMS seems to be returning Medicaid to being a flexible federal program, with waivers used as a way to fill the gaps.

She later suggested the commission look into suggesting long-term waivers for states that prove their efforts are worthy of less federal oversight. Today, the waivers are needed every 3 to 5 years.

Mann also said CMS is working toward streamlining its waiver-approval process trying to make it faster to approve waivers similar to those CMS has considered in the past. The agency is doing this through modules of similar waiver applications to provide states with guidance on what CMS is needing for approval.

The agency is also trying to align quality improvement and evaluation plans among Medicare, states, and private insurers, while also simplifying enrollment and eligibility determination.

Most importantly, Mann said, CMS is working to increase the transparency and add public input to its approval process.

For example, the Affordable Care Act (ACA) now mandates that states release their proposals for public comment before submitting them to CMS. The federal government must also publish waivers before it enacts them.

“The waiver process has long been criticized as this inter-working deal that’s cut between the federal government and the executive body at the state level,” Mann said.

A lack of transparency and public input was one problem addressed by the Government Accountability Office (GAO) in the watchdog’s review of CMS’ waiver process, Katherine Iritani, director of health issues at the GAO, told MACPAC Thursday.

“Given the significant federal expenditures governed by these demonstrations, there’s a need for improved accountability and transparency in HHS’ review and approval process,” Iritani said.

The GAO is expected to release next month an updated report on waivers approved since 2007.

The MACPAC panel also heard an update on the use of premium assistance as a mechanism for Medicaid expansion under the ACA.

The update focused on Arkansas. That state is trying to use premium assistance to move its childless adults — who would normally be eligible for Medicaid when that program is expanded — into the state’s health insurance exchange, where they would purchase private insurance instead.

Between the growing number of companies expected to introduce a private exchange later this year and the state-run health insurance exchanges that open for business on Jan. 1, 2014, employee communication will be critical in the coming months, benefits experts say.

By Rita Pyrillis

Published: May 17, 2013 on Workforce.com

As fall benefits enrollment approaches, employers will need to prepare for what one expert calls “the biggest change to occur in employee benefits since managed care”: the introduction of public and privately run health insurance exchanges

Some 44 percent of employers believe that private exchanges, or online marketplaces, will be the preferred way to provide health care benefits in the next three to five years, according to a 2012 survey by Lincolnshire, Illinois-based consultancy Aon Hewitt.

Between the growing number of companies expected to introduce a private exchange later this year and the state-run exchanges that open for business on Jan. 1, 2014, employee communication will be critical in the coming months, benefits experts say.

Recently released federal guidelines require employers to notify their workers of eligibility requirements for their state exchange by Oct. 1, 2013. To the relief of many, the U.S. Labor Department also provided model notices that employers can give to their workers, which eliminates the need to develop their own notifications.

“It’s a huge paradigm shift,” says Alan Cohen, chief strategy officer at Liazon Corp., a private benefits exchange firm based in New York. “Five years ago people thought this idea of an insurance marketplace was outlandish, but now it’s on the tip of everyone’s tongue. On the negative side, this represents a big change, but there’s such big upside as well, and employers need to communicate that.”

He says that the first four months of 2013 have been the company’s busiest. Liazon, which was founded in 2007, caters to small and midsize employers that use the company’s Bright Choices Exchange to offer a variety of different products including health, dental, vision, life and disability products from a number of national and regional providers. The company has about 2,300 clients, Cohen says.

Liazon, along with Bloom Health in Minneapolis, eHealthInsurance, in Mountain View, California, and Aon Hewitt are among the first to jump into the private exchange market. But a number of competitors, including Buck Consultants, Mercer and Towers Watson & Co. have also launched exchanges in recent years.

Eric Grossman, a senior partner at Mercer, which launched the Mercer Marketplace in January, says that employers introducing a private health exchange must tell employees not only how their benefits are changing but also how they are not changing.

“Just because their benefits will be delivered through an insurance exchange, their employer is still sponsoring that plan and providing them with coverage and not washing their hands of benefits,” Grossman says. “One way to reinforce that is to put the company’s name on the exchange. When an employer goes into the Mercer Marketplace portal they will see their employer’s name front and center.”

Decision support tools, like online health plan comparisons and cost estimators, will be key in smoothing the transition to a private exchange model, says Ken Sperling, Aon Hewitt’s national health exchange strategy leader.

“We have invested significantly in decision-support tools,” he says. “Employees are getting more choice than they are typically used to seeing, so it’s very important. People can come online, and just like Amazon and Zappos, they can filter those plans however they want.”

Aon Hewitt, which launched its Corporate Health Exchange last year, enrolled more than 100,000 participants in the fall, including employees at Darden Restaurants Inc. and Sears Holding Corp. According to a post-enrollment analysis, 42 percent bought less coverage, 26 percent bought more and 32 percent chose a plan similar to their current coverage. Sperling points out that two-thirds said they had a good understanding of how the exchange works.

But perhaps the greatest communication challenge lies ahead as employees whose companies are moving to an exchange also start sifting through information on the public exchanges, which expect to enroll between 20 million and 30 million people.

Under the Affordable Care Act, employers will be required to offer health care benefits to employees who work at least 30 hours a week starting in January 2014. Employee contributions are capped at 9.5 percent of their income, which means that some employees may find a better package of benefits on the public exchanges if their employer’s plan is considered unaffordable.

Families with income between 100 percent and 400 percent of the federal poverty level (between $23,550 and $94,200 for a family of four under 2013 guidelines) who purchase health insurance on the public exchanges are eligible for a premium tax subsidy to reduce the cost of coverage. Families offered coverage through their employer are not eligible for a subsidy unless the company plan does meet the minimum actuarial value of 60 percent or unless the family must pay more than 9.5 percent for the premium.

Explaining who is eligible for what won’t be easy, Mercer’s Grossman says.

“The real conundrum for employers, especially for those with large segments at or below two times the federal poverty limit, will be finding themselves in the uncomfortable position of preventing employees from getting a federal subsidy to purchase insurance on the public exchanges. It will require lots of communication requirements and lots of personal counseling and coaching. The problem is that the vast majority of employees will be eligible for an affordable plan, which prevents them from getting a subsidy. It won’t be easy for employees either.”